Terminal Dues Study Released
Posted on October 28th, 2014

At the request of the U.S. Postal Regulatory Commission, Copenhagen Economics has assessed problems associated with the Universal Postal Union’s current system of terminal dues. The study’s executive summary states that the application of different terminal dues to designated and non-designated operators results in the following: 
  • distorted competition among first-mile delivery operators and, in addition, among last-mile operators;
  • increased demand for delivery services covered by the system relative to services outside the system. This leads to excessive use of packet delivery services at the expense of parcel delivery services.
  • distortions in mail and trade flows by increasing demand for less efficient cross-border delivery of letter post6 (including packets), especially from certain countries; and
  • financial transfers between delivery operators which, in turn, may cause distortionary spill-over effects (e.g., higher taxes to fund postal operators’ losses).

Further details can be found in the report, The Economics of Terminal Dues, available here.

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